Petrobras Output Slides on Weak Prices in Q2

Hydrocarbon production at Brazil's Petrobras slid 3.7% quarter on quarter in the three months ending June 30, to 2.802mn barrels of oil equivalent/day, the company said on July 21.

Petrobras decided to mothball 62 shallow-water platforms in response to the coronavirus pandemic and the resulting market collapse, it said, as current prices do not cover costs at these projects. Operations have also been disrupted by virus outbreaks at some fields. Output was still 6.4% higher year on year in the second quarter, however.

The company's gas production in the second quarter averaged 512,000 boe/d, down 4.5% q/q but up 2.4% y/y.

Petrobras is on a major divestment drive, to pay its debts, which grossed $87bn at the end of last year, and free up capital to invest in new deepwater oil projects. It just sold its remaining 10% stake in Brazil's largest gas pipeline company TAG to France's Engie and Canadian investment fund Caisse de Depot and Placement du Quebec, for $188mn.